Eight Steps to Successful Retail Labor Scheduling Implementation

As brick and mortar retailers are under siege by online competition, the criticality to having an engaged, trained and effectively scheduled workforce has never been greater. Despite the ubiquitous technology being infused into stores, a retailer’s workforce is the best weapon to differentiate the brand and to drive customer satisfaction and sales.

Many retailers have made the investment, or have on their roadmaps, to implement robust labor scheduling software applications to create optimized schedules. It’s a logical expenditure to make considering the potential benefits and the fact that it is a retailer’s highest controllable expense. Unfortunately, many retailers completely fail to implement such systems at all, after spending millions of dollars. Or, they don’t realize projected ROI after implementing.

What Success Looks Like

This will not be an assessment of the various labor scheduling software providers (in my experience of implementing different solutions with retailers, most reputable vendors can be effective). Instead, I’d like to bring attention to eight key steps that will help ensure success. The operational definition of success we’ll strive in this exercise is high end-user adoption and ROI realization.

Step 1: IT as a Strategic Business Partner

It is critical that IT and the business (typically Store Ops, HR, and Finance) work together to define the goals and objectives of a labor scheduling solution and create detailed requirements prior to an RFP to initiate the vendor selection process.

Store Ops must be the owner and driver of the business requirements while IT needs to create the technical requirements. Even though in many cases the budget for the capital expenditure of the scheduling software and hardware, as well as the budget for internal and external resources, may reside with IT, the internal customer is Store Ops. They must have a strong voice in the vendor selection, and remain heavily involved throughout the entire journey through implementation and going forward. Store Ops implementing a solution that they had little or no say in selecting is a recipe for disaster.

Step 2: Create a Cross-Functional Implementation Team

Store Ops and IT aren’t the only departments that touch labor scheduling implementation. Stores, Field Management, Corporate Store Ops Support, HR, Finance, Legal, Loss Prevention, Marketing, etc. are all examples of business units impacted by implementation. Many retailers fail to create this cross-functional project team, or do so too late in the process and often omit critical areas. This is a huge mistake and can be catastrophic to the project’s success.

A cross-functional labor scheduling team needs to be built at the very start of the process, beginning with requirement definition, and progressing through vendor selection, design, testing, pilot and full rollout.

Although all the roles identified are critical, I cannot emphasize enough how important it is to have representation from Store Managers and District Managers. They are the ultimate end-users for worker scheduling and their fingerprints must be all over the engagement from start to completion to ensure their concerns are addressed.  This input from stores regarding what will have a major impact on running their business, will be necessary to provide credibility. Furthermore, they’ll often be the ones working most directly with your scheduling solution. Having your best frontline supervisors weigh in will help ensure you get the solution you need.

I have also seen retailers get HR and Legal involved after design sessions (where business work rules are defined) and build have occurred. This is too late in the process. If a red flag is raised by these departments, critical time and resources have been wasted if business policies must be re-designed to mitigate potential exposure.

Step 3: Create and Refine Labor Standards

For a labor scheduling application to be effective, it must be able to accurately forecast how much workload will be created and then schedule teams and workers to meet workload demand by day of week and time of day. As a prerequisite, a retailer must have labor standards to create this forecast.

Typically, this is done through activities like a time and motion study, and by creating an “activity dictionary” of all activity that occurs within a store and determining workload values for these activities. Normally these activities are classified as either fixed or variable (although some retailers create an even more granular breakdown) and frequency is documented (daily, weekly, monthly, etc.). If an activity is classified as variable, a driver must be identified to forecast workload. Examples may include the time needed to unload and stock a truck, which will be based on the number of cartons or units received, or cashier hours which will be determined based on the number of transactions. In these examples, cartons or units and transactions are drivers and must be forecasted to determine workload.

Do not fall into the trap of rationalizing too many activities as variable. This adds unnecessary complexity and can cause inaccurate workload determination. When contemplating if an activity should be fixed or variable, be honest with yourself about the ability to forecast that driver. You can make a case that the driver for a store planogram is linear feet of shelf space, but if you can’t accurately forecast linear feet by store two weeks out you will be better served using a fixed labor amount.

One of the biggest mistakes retailers make with labor standards is the trap of trying to be precise rather than accurate. Projecting retail workload is not a precise science. The quest to achieve precision can be a killer in implementing labor scheduling solutions. If you have labor standards in place already, challenge yourself about the need for updates, particularly if your business process has changed since the labor standards were originally created or you have implemented new technology to reduce the time it takes for an activity to occur.

Step 4: The Importance of Operational Readiness

Operational readiness identifies the non-systematic processes and execution that a retailer must execute. If not quantified and addressed, they will destroy the projected ROI from your labor scheduling solution. Examples include:

Schedule adherence: Are your people actually working the posted schedules?

Associate availability: how flexible is your workforce to address peak and slow business periods by day of week and time of day?

Full-time/part-time ratio: high full-time ratios create a very restrictive environment for creating an effective schedule that meets workload forecasts.

Cross-training: have you invested in training your team to perform multiple functions within the store and is this training documented in a system of record?

The above cannot be addressed by even the most sophisticated software. As part of the process of a successful labor scheduling implementation, you must develop a baseline quantitative score of where you stand in these areas and immediately develop an action plan to improve them prior to full implementation. If your organization lacks the discipline to work the schedule, you may have hired too many people with restrictive availability. If your staff has not been trained to perform multiple job functions, the system will be constrained from maximizing its full functionality.

Step 5: How Workforce Management Intersects with Change Management

One of the most common themes I hear when I attend labor scheduling user conferences and listen to retailers tell the story of their experience implementing solutions is that they underestimated the change management impact on the organization.

The impact of changing an hourly associate’s schedule, even slightly, is dramatic, stressful, and highly emotional. You need a proactive plan in place to effectively mitigate the risks and ensure user adoption. Your change management team must be part of the project team from the beginning and utilize tools such as stakeholder risk analysis, communication plans, executive alignment and project goals (are we doing this to reduce costs, drive productivity, increase sales, increase the customer experience, etc.).

Unfortunately for many Managers and Associates in the field, the term labor scheduling project is synonymous with cost reduction and spurs fear and anxiety. I have been involved in implementations where the business is strong and cost reduction is not the objective and others where it is. In either case, it is critical for honest messaging and risk mitigation plans to be executed.

Your organization also must decide how aggressive it wants to be in the balance of migrating from associate-centric schedules to customer-centric schedules. Although in almost all cases there is a desire to move the needle toward customer-centric schedules, each retailer must determine how far is too far. Saturdays and Sundays may be your busiest days of the week, but do you really want your full-time associates to work every weekend without ever having a whole weekend off? Do you “grandfather” in long-tenured, loyal associates and allow them to maintain their current schedules or will the new rules apply to all? There are no simple answers and they will be different for each retailer, but questions like these must be addressed as part of an effective change management plan.

Step 6: Labor Scheduling Analytics

Before you embark on labor scheduling implementation, determine your analytics strategy and requirements. Many organizations have fragmented reporting and KPIs across the organization. This is your opportunity to evaluate and determine the true metrics you are going to utilize to ensure you are achieving desired targets in critical areas such as productivity, cost control, conversion and customer satisfaction. Most likely, as a result of your implementation, you will have access to data that was previously not available to the organization.

You also must evaluate the benefits and downside of developing custom reports above and beyond the “canned” reporting provided by your software solution partner. Are the results of new reporting worth the time, effort and cost associated with setting up tracking and creating those reports.

Now is also the time to consider the benefits of leveraging the expertise of an outside firm that can aggregate data from workforce management software, HR data, POS, traffic counters and customer feedback reporting. This will allow you maximize learning from all available data—often in an easy-to-use dashboard—and drive actionable results.

Step 7: Making Labor Changes in Phases

I would never recommend a “big bang” methodology of rolling out labor scheduling to all your stores at the same time. A thoughtful, phased implementation plan is a best practice worth strictly adhering to. Your initial pilot store group needs to be small but selected by creating a matrix of store attributes such as sales volume, store size, urban and suburban locations, manager tenure, state-specific labor laws, etc.

These pilot stores will be your lab and will require hands-on attention to ensure the software is performing as designed, edits are kept to a minimum, change management concerns are addressed and process improvements are applied. A critical part of the phased approach is the delineation between a true configuration issue (you get additional hours for stocking on Tuesday but you receive your weekly truck on Thursday) as opposed to the schedule is poor but the true issue is that people are now working days and times they didn’t in the past to meet customer traffic patterns. Once issues have been identified and addressed, you can now begin a phased rollout to the remaining stores in the chain and use the pilot District Managers and Store Managers as advocates.

Step 8: Culture of Passion for Labor Management

The journey doesn’t end after the last store goes live on the new labor planning application. You must continually follow up and audit your stores to ensure compliance and seek opportunities for refinement. Your leadership team must be trained on how to manage using new metrics. You will now have a quantitative score of scheduling effectiveness. The goal should be to partner with your Store Managers to find the root causes of low scores and to provide coaching and guidance on how to improve. If the issue is the availability of associates, it may take some time and you will need to develop an action plan. The culture must change, and you can no longer settle for just “meeting payroll budget”. Having the right person, in the right place, at the right time, doing the right thing, will ultimately help drive a great customer experience that cannot be duplicated online.

Stepping Into a Brighter Retail Future

The benefits of a successful labor scheduling implementation are significant. Your workforce can become the key differentiator in effectively competing in an omnichannel retail environment. However, the risk is high and the consequences of a failed implementation are severe. Following these eight steps will help perform a successful labor scheduling implementation. They will provide your organization with the roadmap necessary for benefit realization and risk mitigation. Take them seriously. And take them one at a time.